Increasingly, sellers of IT are finding it harder to win large
software and hardware capital purchases contracts, which
traditionally followed three- to seven-year obsolescence and
refresh cycles. The shifts in technology and business models
accelerated by the
recession are forcing these vendors in particular to adopt
more of a professional
services revenue model.

Buyers of technology, on the other hand, are moving to IT shared
services and software-as-a-service
(SaaS) models to get off of the capital outlays roller
coaster. They want smoother and more predictable operating and
charging models, beginning with long-term professional services
and outsourcing engagements.

Both the buyer and seller of services therefore need to focus on
the implementation and integration of solutions, placing a
complex burden on the services delivery personnel themselves, as
well as those who managing the services providers.

Ellsworth: The change and the focus on
professional services is moving from something that was nice to
have, to something that is necessary to have to be
successful.

Software companies are a great example. Historically, companies
in that sector may have done mostly product business and less
service. Services are now necessary to deliver success, and the
services business is a very healthy part of the software business
and is contributing significantly to the bottom-line.

Now, organizations have to understand how to get a handle on the
people they have working for them, how best utilize them, and how
to make sure that your employees, those assets, are challenged
and happy, but that you are delivering that service to provide
value to your customers.

There needs to be more discipline, more information, and a better
process for decision-making and forward planning, so that the
organization can scale and scale in a financially successful
way.

So, the stakes are higher, in terms of the discipline and the
approach that we need to take to manage that professional
services part of the business.

Sloan: At RTM Consulting, one of our
core areas of focus is in this area of resource management. How
can you get the right person in the right place at the right time
and drive up utilization, but at the same time, make sure that
you're delivering value to your end customers and leaving them
satisfied and coming back for more?

When a software company shows up with its professional services
arm, the client is expecting that each and every one of the
people who show up is an expert in the software, the technology,
and the implementation process. The days of people learning on
the job and coming up to speed are long gone.

The challenge today is for companies to get visibility into the
type of work that’s coming down the pike, so
that they can proactively train their internal resources and be
prepared for that work, so that when they do show up, they are
the experts.

Just as 30 years ago, any manufacturing company had big
inventories of supplies, finished products, sitting in their
warehouse. Ten or 15 years ago, the big services organizations
were able to have excess resources on the bench, in the office,
waiting for that next project to arrive.

What we’ve done is taken those same principles
-- forecasting what the future scenarios look like, what the
demands look like, and then translating that back into how many
resources you are going to need, the types of resources, the
skills those resources need to have.

You can, at that right moment, bring on a new employee, go to a
third-party contractor to fulfill that demand, or give yourself
enough advanced notice to cross-train your existing resources on
new technologies, new products, so that they can work across your
portfolio and not just focus on one particular area.

Getting to the solution

Ellsworth: There are four critical success
factors, but also the building-block approach. In other words,
you need to start with the fundamental. You need to understand
your people and their skills and get that view of your business.
Then, you can start to add levels of maturity, look at
forecasting, look at different models for resource allocation,
and bring in project management.

As organizations start to put the buildings blocks in place, and
adopt the disciplines and build the processes that work in their
business, [they can have trouble] scaling that.

You can make that work within a small team or across a couple of
small teams, but ... you need visibility ... to scale that to
your entire services organization, including management. [But]
you can't scale and reinforce that discipline without
automation.

The two really have to go together. One won’t be
successful without the other in a large professional services
organization. Automation brings the scale factor.

The ability to measure and monitoring is something that Mark also
highlights as critical success factors. Again,
you’ve got a large group of people with a lot of
activity going on. There's lots of data, but you have to roll
that up to the management level to make it valuable to help drive
decisions in the business.

... Our focus has been on driving that view as a professional
services organization, but importantly driving that view inside
the context of the broader company.

It starts with those building blocks around who are your
resources, what are their capabilities, and where are they being
utilized. It brings you to the next level of maturity in terms of
being able to look at forecasts and do some demand and capacity
planning.

And then it goes even further from a resource perspective to that
professional development side. Let's look at the gaps in the next
six to nine months. Where can we identify resources and put them
on a development plan to fill those gaps?

We're managing the day-to-day business of a professional services
organization and going beyond that to deal with project
management, engagement management, and right through to billing
for a professional services organization and for technology
companies that also have a strong product side of a business.

The paybacks can be, and are, significant. First and foremost,
is really speed to revenue and cash flow.

The
Changepoint solution has been active and working with
customers in their professional services organization for many
years, going back to the late 1990’s. We also
deliver a project
portfolio management capability to allow them to manage
products and manage delivery of those product applications.

Sloan: The paybacks can be, and are,
significant. First and foremost, is really speed to revenue and
cash flow. Lori mentioned that doing this in a large services
organization is critical and an enabling technology is required
to make that happen.

I’d argue the same for small professional
services organizations. Having the information that tools like
Changepoint can put at your fingertips, you can quickly identify
people in your organization that have the right skills, that off
the top of your head you might not think of, and staff projects
quickly with the appropriate resources, ultimately enabling you
to get that revenue.

Billable utilization

Secondly, you start to see a significant lift in overall billable
utilization. This is for the professional services organization.
Again, by getting better visibility into the skills that
different resources have, you realize you have many more people
in the organization that can do work than you think of.

Other research points to the fact that companies who do this
development of staff and get projects started on time are
significantly more likely to finish their projects on budget and
on time and drive significantly positive customer
satisfaction.

Companies that aren’t able to do this -- take an
extra five, 10, or 15 days to fill some of the slots on a project
-- tend to go over-budget, don’t get it done on
time, and, as a result, have poor customer satisfaction. If you
think about it, it's back to that mantra, "Do it right the first
time." This process helps you do that.

Ellsworth: As you're adding discipline and increasing maturity,
there is participation from the practitioner, if you can position
the value to them in terms of increased opportunity or an ability
for them to better manage their schedule and not be burnt out.
They have access to different opportunities. It's very valuable
and can help them actively participate in moving the business
forward and not kind of fight against it.

A broader pool of resources comes there to help you respond to
customers which just increases the need to understand who those
resources are and what they can bring to the table to support
these services.

Customers of mine, in Europe for example, are quoting that on a
year-over-year basis, they are able to reduce non-productive time
-- and therefore the cost of that non-productive time -- by 16
percent.

Other customers will articulate the value of this entire solution
in terms of revenue increase, the focus of getting control over
their resources, who they have and how they can most effectively
deploy them. Another customer of mine in Europe talks about a 30
percent increase in revenue, linked directly to implementing some
of these practices in getting that control over their
resources.

Sloan: The same lessons apply to shared services
organizations, such as internal, large IT departments managing
multiple projects per year to deploy technology.

They can leverage the technology that Changepoint offers to keep
track of the people, where they are deployed, what skills they
have, what new projects are coming in, and achieve a similar
increase in productive utilization of those resources. But to
your point, in terms of creative organizations, this would apply
to any organization that is focused on moving people with
particular skill sets to a unique project.

When we architect a solution for clients, it’s
a unique solution taking into account the various constraints
and the environment of that client.

That includes engineering services organizations, creative
agencies that are moving talent from one project to the next --
anyone who relies on definite skills and knowledge that
aren’t just easily interchangeable. This helps
forecast where you can get the biggest bang for the buck with
those people.

In terms of getting started, when we typically work with clients,
we come in and do a quick assess and architect phase where
we’ll take a look at how resource management is
being done today, compare that to the best practices that
we’ve defined for JIT Resourcing, and identify
areas where you are strong and areas where there is an
opportunity for change and improvement. When we architect a
solution for clients, it’s a unique solution
taking into account the various constraints and the environment
of that client.

JIT Resourcing is a defined approach. We have recognized that
there are unique aspects to every business, and can tailor the
solution to fit there.

By deploying these processes now, you can start to learn the
continuous improvement that’s needed, but be
enabled as more and more of your clients go to SaaS, but
you’ve got to have to deploy people with the
moment’s notice.

You're going to get much better at predicting and forecasting
what your future needs are, enabling you to align your resources
and capabilities accordingly. You want to achieve the benefits we
talked about -- speed to revenue, speed to cash-flow, and zero
idle resources.